1. Field of the Invention
The present invention relates to combinatorial exchanges and, more particularly, to a method of conducting a live, expressive combinatorial exchange, and computer instructions which, when executed by a processor, cause the processor to perform one or more steps of the method.
2. Description of Related Art
Various systems have been proposed and constructed to support online exchanges. The most general type of exchange is a pure exchange which permits one or more bidders to offer to sell and/or purchase one or more items to/from one or more bid takers. An item may be any entity of value, such as a good, service or money. A forward auction is a special case of an exchange with a single seller. A reverse auction is a special case of an exchange with a single buyer.
Combinatorial exchanges support advanced exchange designs and expressive bidding. These features permit the exchange to be designed to achieve best economic efficiency.
One example of expressive bidding is combinatorial bids. Combinatorial bids allow bidders to bid on multiple items with a single bid. The combination, or bundle of items, is determined by the bidder. This is advantageous, when the items exhibit complementarity, i.e., when the value of the bundle of items is worth more to the bidder than the sum of the separate item values, or substitutability, i.e., where different items are interchangeable to the bidder. Combinatorial bids allow bidders to express their true preference, resulting in the best economic allocation.
Heretofore, participants in a combinatorial exchange, especially bidders and bid takers, received little or no meaningful feedback regarding submitted bids and/or rules that determine how the exchange allocation is determined. This lack of meaningful feedback often resulted in bidders placing bid's without any assurance that such bid(s) would be competitive. While simple forward or reverse auctions often provide feedback regarding the current winning price, in a combinatorial exchange, especially a live exchange, providing the current winning price may be, and often is, insufficient to enable exchange participants to submit competitive bids and/or rules that modify the exchange objective. This is because the current winning price is often not the only criteria by which an allocation is determined in a combinatorial exchange.
What is, therefore, needed and not disclosed in the prior art is a method and apparatus for conducting a live combinatorial exchange that overcomes the above problem and others.